PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      5c 
ACTION ITEM 
Date of Meeting    October 22, 2013 

DATE:    October 15, 2013 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Ralph Graves, Managing Director, Capital Development Division 
Wayne Grotheer, Director, Aviation Project Management Group 
Janice Zahn, Assistant Director of Engineering, Construction Services 
SUBJECT:  Change Order 173 to Centralized Pre-Conditioned Air Project at Seattle-Tacoma
International Airport  CIP # C800238 

Amount of This Request: $ 965,000          Source of Funds: Airport Development Fund,
Revenue bonds, Grants 
Est. Total Project Cost:  $ 48,790,000 
Est. State and Local Taxes: $ 3,486,929 

ACTION REQUESTED 
Request Commission (1) approval of an additional authorization of $965,000  to replenish
construction contingency due to disputed costs and (2) authorization for the Chief Executive
Officer to issue Change Order No. 173 for Contract MC-0316677, Centralized Pre-Conditioned Air
Project (PC Air) at the Seattle-Tacoma International Airport, in the amount of $453,143 to resolve
the costs related to changes to the pipe hangers/supports and seismic restraints for the PC Air
mechanical plant piping. 
SYNOPSIS 
On September 13, 2010, the Port executed a construction contract for PC Air with Lydig
Construction. During construction, many issues were discovered that were not addressed in
contract documents. In multiple previous Commission actions, change orders were approved to
pay for the difference in cost necessary to resolve individual issues and to extend the project
schedule. 
The additional authorization of $965,000 is needed to replenish the construction contingency as a
result of change orders issued to resolve construction contract disputes. As there are still dispute
issues to resolve along with the indirect costs associated with the schedule delays, staff intends to

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 2 of 7 
return to Commission as required for additional authorization as those disputes are resolved and
costs negotiated.
The work is currently projected to be complete by the fourth quarter of 2013. The indirect costs
related to the construction contract have not been fully addressed at this time, as the causes and the
costs associated with the schedule delays are currently in dispute. As stated previously, staff will
return to Commission when the final contract completion date is known and costs are finalized. 
BACKGROUND 
Lydig Construction was the low bidder with contract execution on September 13, 2010. The
original contract completion date was December 12, 2012.   There have been two contract
extensions granted, extending the current contract completion by 258 days to August 26, 2013. 
Despite the design and contracting challenges, the project is operational on Concourses A, B and C
and the South Satellite. Cost growth is far less than the value of the $21.9 million in FAA grants
that were made possible by the expedited design prior to awarding the contract.  Nevertheless,
project completion has slid from the August 26, 2013, completion date and is now scheduled for
the fourth quarter of 2013. 
CHANGE ORDER DESCRIPTION 
The following information relates to the pending change order scope and cost: 
Change Order No. 173 
Scope of work: Provide pipe hangers and seismic restraints as required for the PC Air mechanical
plant piping for the total cost of $453,143. 
CONTRACT INFORMATION 
The following information relates to the contract and competitive award: 
Contract award date:                         September 13, 2010 
Original period of performance:    September 13, 2010  December 12, 2012 
Previous contract extensions:                           258 Days 
Contract extension this change order:                       0* Days 
Current Contract Completion Date:                  August 26, 2013 
FINANCIAL INFORMATION 
Original contract amount:                        $27,013,400.00 
Previous Change Orders Executed:                   $6,976,664.00 
Current contract amount                         $33,990,064.00 
This request, Change Order No. 173                    $453,143.00

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 3 of 7 
Subtotal Construction Costs                       $34,443,207.00 
Anticipated sales tax @ 9.5%                       $3,272,140,67 
Revised Contract Amount                       $37,715,311.67 
*As there are multiple issues affecting the completion of the work, additional time may be granted
by separate change order after an analysis of whether this specific issue impacted the project
critical path and delayed the construction schedule. 

PROJECT JUSTIFICATION AND DETAILS 
The Centralized PC Air project is a very large and complex project that benefits airlines and
travelers. Regardless of the outside weather conditions, a traveler expects the temperature of the
inside of an aircraft to be a comfortable 68 to 70 degrees. Generally, an airplane is able to achieve
the right temperature inside by running an auxiliary jet engine. To properly condition the inside of
the airplane cabin, the auxiliary engine burns fossil jet fuel. If all the jet auxiliary engines across
all gates are considered, the carbon dioxide generated over a year equates to about 8,000 cars on
the road, or 40,000 metric tons of greenhouse gases. The estimated amount of jet fuel burned is
about 5 million gallons per year. 
Instead of burning fossil fuel, the PC Air project is a system of chillers, heaters, and pipes that
provide both the heating and cooling to the aircraft from a central plant at the Airport. The Airport
central plant can more effectively keep the airplane at a comfortable temperature when it is at any
one of SeaTac's gates. The flight crews can turn off aircraft auxiliary engines and plug in at the
gate to receive both heated and cooled air. 
This will lower costs to the airlines while producing significant environmental benefits by reducing
the release of tens of thousands of tons of carbon dioxide (CO2) emissions each year. This project
is a cost-effective way to aid the airlines while improving the quality of the environment. The
airlines approved funding for this project, and a Federal Aviation Administration (FAA) Voluntary
Airport Low Emission (VALE) grant was obtained. The FAA provided $21,912,679 in grants for
this project. 
The most challenging part of building this project has been the piping installation. Conditioned
(chilled and heated) glycol is circulated in these pipes from a central location to every aircraft gate.
The passenger loading bridge structure is used as the final link to provide warm or cooled air to the
airplane passenger cabin. The glycol piping is large (6", 8" and 10" in diameter) and because it is
full of liquid, it is very heavy.  It is hung from large hangers that penetrate walls, is supported by
structural beams and columns across the varying concourses, and has to run for miles across
building walls and roofs. This project includes the installation of 15 miles of piping within our
existing terminals and going to each jet doorway at 73 gates. The piping installation is completed.
Testing, startup and commissioning a system this large is challenging; however, that work is
underway and airlines are beginning to use the system. 
Due to the expedited design period, many items were omitted from the contract documents. The
PC Air mechanical plant piping details were not properly referenced or designed in the contract
documents and were thus not fully accounted for in the contractor's bid. The resulting Change

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 4 of 7 
Order 173 resolves all costs associated with the installation of the pipe hangers, supports and
seismic restraints within the Pre-Conditioned Air mechanical plant.   The additional funds
requested resolve other construction disputes with the contractor that did not require Commission
action, some of the items include the North  Satellite Tunnel and Utility  Room piping
modifications, the ground mounting of PC Air units at gates A6/7, and pipe anchors and guide
modifications.
Although the cost of the project has increased, the financial benefits remain attractive. The
following is based on today's jet fuel price of $3.06 per gallon minus 10% for energy costs (rough
number). 
The benefit is the potential annual savings of 5 million gallons of jet fuel. 
5,000,000 gallons of jet fuel saving per year @ $2.75 net benefit = $13,750,000 per year. 
$45 million project cost minus $21.9M VALE: $23.1M Port cost. Payback period = 1.7
years 
$50 million project cost minus $21.9M VALE: $28.1M Port cost. Payback period = 2.0
years

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 5 of 7 
FINANCIAL IMPLICATIONS 
Budget/Authorization Summary             Capital      Expense   Total Project 
Original Budget                     $40,600,000          $0   $40,600,000 
Previous Authorizations                 $47,235,000     $590,000   $47,815,000 
Current request for authorization              $965,000          $0      $965,000 
Total Authorizations, including this request    $48,200,000      $590,000    $48,970,000 
Remaining budget to be authorized                $0          $0          $0 
Total Estimated Project Cost              $48,200,000      $590,000   $48,970,000 
Project Cost Breakdown                     This Request       Total Project 
Construction                                $881,280        $35,823,242 
Construction Management                         $0        $3,116,244 
Design and Construction support                       $0         $3,759,000 
Project Management                             $0        $1,486,449 
Permitting                                       $0          $236,856 
State & Local Taxes (estimated)                    $83,720         $3,486,929 
Total                                       $965,000         $48,790,000 
Budget Status and Source of 
Funds 
This project (CIP # 800238) was included in the 2013-2017 capital budget and plan of finance
with a budget of $45,535,000.  The budget was increased by $1.1 million in January 2013. 
The current budget increase of $965,000 will be transferred from CIP # C800404, Aeronautical
Allowance,  resulting  in  no  net  change  to  the  2013-2017  capital  budget.  Thefunding 
plan includes $21.9 million in VALE program grants, existing revenue bonds, and the Airport
Development Fund. This project was reviewed by the airline representatives and approved
through a Majority-In-Interest vote in June 2008. 






Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 6 of 7 

Financial Analysis Summary: 
CIP Category             New/Enhancement 
Project Type              infrastructure 
Risk adjusted Discount rate     10% 
Key risk factors             Realization of savings due to lower jet fuel usage 
Project cost for analysis        $25,925,000 (total cost excluding grants) 
Business Unit (BU)          Terminal Cost Center 
Effect on business           NOI after depreciation will decrease due to recognizing 
performance             depreciation on the full cost yet recovering capital costs for the non-
VALE funded portion only 
IRR/NPV             NPV range of net saving to airlines: $5 million to $30 million. 
(calculated in 2010) 
CPE Impact             CPE will increase by $.13 in 2014; however, this costs will be 
offset by decreased airline operating costs. This project was
included in the business plan forecast. 

ATTACHMENTS TO THIS REQUEST 
None. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 

On September 10, 2013, the Commission authorized a budget increase of $600,000 for the
project design consultant and Port staff support through the completion of the project. 
On  May 28,  2013,  the  Commission  authorized  execution of Change Order 166, a 
contract extension of 221 days, which established a new project completion of August 26,
2013. 
On November 27, 2012, the Commission authorized a budget increase of $1,100,000 to 
replenish construction contingency due to disputed costs.  Additionally, the Commission 
authorized the execution of Change Order No. 121 in the amount of $344,558 to resolve the 
remaining disputed costs related to Change Order No. 113 due to changes in the routing of PC 
Air piping at Concourse D. 
On October 2, 2012, the Commission authorized a budget increase of $2,000,000 to cover
additional costs related to construction, design support, and Port Construction Services and
Port Maintenance support for the project.  Additionally, the Commission authorized the 
execution of Change Order 119 in the amount of $509,013 for additional costs related to the 
North Satellite Tunnel pipe routing. 
On September 11, 2012, the Commission authorized execution of Change Order 113 in the

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 7 of 7 

amount of $776,910 for changes to the pipe routing at Concourse D.  Total project funding
authorization remained at $40,600,000. 
On September 27, 2011, the Commission authorized a budget increase $3,525,000 to cover
additional costs  to the  construction budget, outside  professional services and project
management soft costs. Total p roject funding authorization increased to $44,125,000. 
On May 24, 2011, the Commission authorized execution of a $400,000 amendment to the
professional service agreement with Stantec Consulting. Total project funding authorization
remained at $40,600,000. 
On May 11, 2010, the Commission authorized staff to advertise for bids, apply a Project Labor
Agreement (PLA), and authorize Port Construction Services to perform pre-construction work,
including moving tenants, for Phase I and Phase II of the PC Air Project (CIP # C800238) at the
Airport and execute a construction contract. This authorization was for $36,830,000. The
estimated total project cost is $40,600,000. 
On January 13, 2009, the Commission authorized procurement and execution of service
agreements with consultants to perform design, prepare contract documents, and perform
contract administration for the Pre-Conditioned Air project at Seattle-Tacoma International
Airport in the amount of $3,770,000.